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Colonial ‘Shock’ and Global Inequalities

Recent literature in New Institutional Economics has sought to study the link between colonialism and global inequalities. This strand of analysis has received substantial attention in academic and policymaking circles. But despite making an important contribution to development theory and deepening our understanding of North–South development differentials, this strand of analysis is not without its own set of problems and contradictions. Taking a critical view of NIE literature on colonialism, it is argued that by taking the nation state as the basic unit of analysis and by ignoring global power asymmetries, the NIE approach absolves the role of capitalist imperialism in creating global inequalities, and instead produces an internalist and Eurocentric theory of development.

Abductive Reasoning in Macroeconomics

Macroeconomic analytical frameworks change with events they are unable to explain. The process is closer to abductive reasoning that is based on both events and analysis, unlike induction which is data-based and deduction where analysis dominates. Abduction reasons backwards from the outcome to deduce the framework with which it is compatible. Therefore, it is useful to study how macroeconomic conceptual frameworks evolve after anomalous outcomes such as crises. The post-crisis churning is assessed from this perspective using criteria such as greater generality, systemic feedback, and structural aspects. Abductive reasoning is also used to extract the structure of aggregate demand and supply consistent with the observed negative correlation inflation and growth in India. If prolonged growth slowdowns do not reduce inflation, it suggests underlying aggregate supply is elastic but volatile, so that supply-side issues, not excess demand, are primary inflation drivers. Monetary and fiscal policy need to focus on elements that reduce costs, while avoiding sharp cuts in aggregate demand.

Shift in MGNREGS from UPA to NDA

The approach of the Bharatiya Janata Party-led National Democratic Alliance-II government towards the Mahatma Gandhi National Rural Employment Guarantee Scheme emphasises asset creation in a target-driven, if necessary, top-down fashion. NDA-II has done this without altering the basic features of the programme, as that needs an amendment in the act, a difficult political proposition given its lack of majority in the Rajya Sabha. Such a shift is in contradistinction to the pursuit of demand-driven job creation with a focus on participatory decentralised development under the United Progressive Alliance governments. While the emphasis on assets creation is not without its merits, the programme has been tilted in favour of agriculturists. Landless rural labour households, one-fourth of India’s rural population, have been excluded from the benefits of individual assets since they own no land. Asset fetishism may affect job creation and its target-driven pursuit may defeat objectives like promoting participatory decentralised development.

Citizenship at Sea

Coastal erosions in the Sundarbans have not only dismantled infrastructure and place-based relations, but also adversely affected citizen’s abilities to make claims on the state and to translate these claims into desired outcomes, effecting a “corrosion of citizenship at the margins” which entails waning influence on bureaucratic decisions and, concomitantly, the fading of citizenship rights in practice.

Improving the Drought Resilience of the Small Farmer Agroecosystem

The farming systems followed by farmers in Asia, Africa and Latin America have the potential to deal with the problems thrown up by climate change. This article examines the changing drought ecosystems of poor farmers and also points out that the present paradigm of agricultural development and what it means for small farmers needs to be critically evaluated.

Does Citizenship Abate Class?

Drawing on data from a large household survey in Bengaluru, this paper explores the quality of urban citizenship. Addressing theories that have tied the depth of democracy to the quality and effectiveness of citizenship, we develop an index of citizenship and then explore the extent to which citizenship determines the quality of services and infrastructure that households enjoy. Findings show that citizenship and access to services in Bengaluru are highly differentiated, that much of what drives these differences has to do with class, but there is clear evidence that the urban poor are somewhat better in terms of the services they receive than they would be without citizenship. Citizenship, in other words, abates the effects of class.

Inequality in India–II

To determine the inequality in wage earnings, attention is paid to the distinction between formal and informal types of employment, and the returns to education. Alternative definitions to understand the formal–informal dichotomy are employed to show that employers are increasingly using “informal” workers in formal enterprises. In Part I of this paper (EPW, 29 July 2017), changes in household welfare as measured by per capita household expenditure were analysed.

From Groundwater Regulation to Integrated Water Management

Groundwater over-exploitation poses a severe threat to food, water and livelihood security in India, but the approach to groundwater regulation has been guided by the simplistic prescription that to achieve sustainable use, pumping must be less than recharge. This article explains the hydrological cycle and the close relationship between groundwater and surface water, and argues that the conventional notion of sustainable groundwater use is fundamentally flawed. Groundwater, soil moisture and surface water are part of a single integrated resource, and cannot be regulated independent of each other. The solution is not sustainable use or the compartmentalisation of surface and groundwater but the fair and transparent reallocation of renewable freshwater resources.

Constituency Development Funds in India

India’s Member of Parliament Local Area Development Scheme, in which each MP is allotted an annual discretionary fund to spend in his or her district, offers an incentive to MPs to engage in individual political business cycles, or increased spending just before the elections, to improve their chances of re-election. Have they taken advantage of this opportunity? If they have, has doing so enhanced the likelihood of their re-election? This paper addresses these questions in the context of the 2014 Lok Sabha election.

‘Riskless Capitalism’ in India

A study of the financial processes underlying India’s high-growth trajectory of the 2000s and its relationship with “riskless capitalism,” a term first used by Raghuram Rajan in November 2014, finds that the Indian growth story cannot be over-simplistically explained as a result of “market-oriented” reforms. Public sector bank credit-financed investments, particularly in the infrastructure sector, played a significant role in sustaining growth, most crucially after the global economic crisis. Such a growth trajectory, however, proved to be unsustainable with the expansionary phase coming to an end in 2011–12 and bad loans piling up in the banking system.

Inequality in India–I

Examining the course of inequality in terms of average per capita expenditure, it is seen that the period after the reforms were initiated registered a dramatic increase in the relative growth of welfare in the top expenditure group, even as the poorest group progressed at a rate higher than the mean. The dip in the middle of the distribution disappeared later when a “ladder” pattern of growth was observed, with each quintile group showing a higher growth rate than the preceding one. The major reasons for this changing pattern are discussed in terms of the structure of growth in the Indian economy, particularly what happened in the tertiary and manufacturing sectors. The paper is being published in two parts. Part II will appear in the issue of 12 August. 

Manufactured Silence

Scholarship on the 1984 Bhopal gas tragedy tends to treat the Indian judiciary as the site where political, social and legal forces converged to betray survivors seeking redress. But before this judicial failure, Prime Minister Rajiv Gandhi had already politicised the disaster to protect his economic modernisation programme. Recognising the threat the Bhopal tragedy posed to the ideology behind this agenda, Rajiv Gandhi and his advisers pursued multiple strategies to suppress the gas leak’s resonance in larger political debates. This laid the groundwork for the courts’ later miscarriage of justice and helped shape the disaster’s subsequent place in Indian economic history.

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